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Facebook is reportedly planning to enter the music streaming industryReuters

Social networking firm Facebook is reportedly planning to enter the music streaming industry, posing stiff competition to Apple and Spotify among others.

Music Ally, citing anonymous sources, reported that Facebook is planning to launch an audio music-streaming service, following its experiment with ad-supported music videos.

The company's plans to monetise music videos emerged as an important stepping stone towards the on-demand audio service, according to the report.

Sources told Music Ally that talks for the music-video side of things are at an advanced stage, with a rollout expected to happen in the next few months.

In the first phase, the company will pay royalties to music rights holders for plays of their music videos on its service. It will also launch a system similar to YouTube's Content ID to help prevent piracy.

"It's a mass land grab. Facebook going into the video space was always going to be an enormous, ambitious land grab and no doubt something they've been planning for some time as the potential income from ad revenue will be incredible," a source told Music Ally.

"On Facebook's move into monetised video, all of us could see it coming for months," said another source. "We have all been really utilising it in internal testing. It is way, way ahead of YouTube."

The launch date and specifics of the music-streaming business model and payout formula have yet to be nailed down, the report added.

While Facebook has enough money to buy a music-streaming company, Music Ally's sources expect Facebook "to build rather than buy."

Facebook denied the news in a comment provided to IBTimes UK.

"We have no plans to go into music streaming," a company spokesperson said.

Record labels including Sony Music Entertainment, Universal Music Group, and Warner Music Group have all spoken with Facebook, according to The Verge, though the exact purpose of the talks is yet to be confirmed.

Facebook has expressed an interest in music in the past and has previously partnered with Spotify to help the streaming service with its US launch.

Despite the popularity of the social network as a tool for artists to share news and interact with fans, Facebook is the only one among the five biggest tech corporations not to have set up its own music service.